personalization best practices for engaging online experiences

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Personalization Best Practices for Delivering an Engaging Online Customer Experience Carlos Carvajal, Sr. Director of Marketing, Baynote April 28 th , 2010

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Slides from an American Marketing Association (AMA) webinar re: how to implement online personalization techniques - pitfalls, opportunities, best practices.

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Page 1: Personalization Best Practices for Engaging Online Experiences

Personalization Best Practices for Delivering

an Engaging Online Customer Experience

Carlos Carvajal, Sr. Director of Marketing, Baynote

April 28th, 2010

Page 2: Personalization Best Practices for Engaging Online Experiences

Agenda

• Personalization 101

• Common Pitfalls

• Always Right Personalization

• Real-World Use Cases & Results

Page 3: Personalization Best Practices for Engaging Online Experiences

What is Personalization?

EXPLICIT IMPLICIT

• Profile-based

• Segment-based

• Rules-driven

• Behavioral-based

• Context-driven

• Collaborative Filtering

Personalization is a strategy for delivering a customer

experience that is always personal, relevant and convenient

Page 4: Personalization Best Practices for Engaging Online Experiences

Many Ways to Personalize… Implicit

Product

Recommendations

Content

Recommendations

Page 5: Personalization Best Practices for Engaging Online Experiences

Many Ways to Personalize… Explicit

CustomizationRole-based

Page 6: Personalization Best Practices for Engaging Online Experiences

Many Ways to Personalize… Channels & Content

Page 7: Personalization Best Practices for Engaging Online Experiences

Personalization Benefits

Increase:

• Conversions

• Engagement

• Revenue

• Customer Insights

• Customer Lifetime Value

Page 8: Personalization Best Practices for Engaging Online Experiences

Common Personalization Pitfalls

Page 9: Personalization Best Practices for Engaging Online Experiences

Four Common Personalization Pitfalls

1.Must Build a Comprehensive

Customer Profile First

2.Create Rules to Target Content

Based on Customer Preferences

3.“Ultimate Personalization!”

4.Personalization is Really Hard to

Get Right

Page 10: Personalization Best Practices for Engaging Online Experiences

Pitfall #1: Must Build A Comprehensive Profile First…

Father

Uncle

Husband

CEO

Brother

Engineer

What to recommend???

Page 11: Personalization Best Practices for Engaging Online Experiences

Pitfall #2: Create Rules to Target Content…

Page 12: Personalization Best Practices for Engaging Online Experiences

Pitfall #3: “Ultimate Personalization!”

Page 13: Personalization Best Practices for Engaging Online Experiences

Pitfall #4: Personalization is Really Hard to Get Right

BI, Analytics & MV Testing

• Too much noisy data

• Rear-view mirror

• Guess work

Re-design

Re-launch

Re-platform

Annually

Quarterly

Monthly

Tuning, Merchandizing & Editing

• Manual & costly

• Top 5% most popular only

• Expert bias

Development & QA

• Too many projects

• Conflicting priorities

• Expensive

Approval & Deployment

• New issues with priority

• Missed deadlines

• Out-of-sync with market

Too Slow, Too Expensive

Page 14: Personalization Best Practices for Engaging Online Experiences

Personalization in 2001 – Learn From the Past

Source: ‘Web site personalization’, IBM 2001

Page 15: Personalization Best Practices for Engaging Online Experiences

Always Right Personalization

Page 17: Personalization Best Practices for Engaging Online Experiences

VS.

Always Right Personalization

“By understanding who you are and your shopping

history… I can accurately predict which products you are

currently interested in.”

“What are you looking for?”

“Many customers who came before you liked this

beginner snowboard…”

Page 18: Personalization Best Practices for Engaging Online Experiences

Collective Intelligence Powers Always Right Personalization

Invisible CrowdsActions > Words

Whole > Sum of parts

Real-time feedback

Crowds are freeCrowds > Expert

Crowds reduces cost

7 deadly biases

Aligned incentives?

Sell 1 of manyNiche segments

Micro projects

Real-time trends

But how?

Combination of Social and Cognitive Science

Page 19: Personalization Best Practices for Engaging Online Experiences

Respond to Changing Customer Needs in Real-Time

BI, Analytics & MV Testing

• Too much noisy data

• Rear-view mirror

• Guess work

Re-design

Re-launch

Re-platform

Annually

Quarterly

Monthly

Tuning & Merchandizing

• Manual & costly

• Top 5% most popular only

• Expert bias

Development & QA

• Too many projects

• Conflicting priorities

• Expensive

Approval & Deployment

• New issues with priority

• Missed deadlines

• Out-of-sync with market

Automatically Observes

Emergent Patterns

Use Collective Intelligence

Little IT Involvement

Real-time Automatic Adjustments

Page 20: Personalization Best Practices for Engaging Online Experiences

Three Principles for Achieving Always Right Personalization

1.Focus on Context First

2.Understand Customer Intent

Through Engagement

3.Like-Minded Peers Know What

They Like Best

Page 21: Personalization Best Practices for Engaging Online Experiences

Principle #1: Focus on Context First

What to recommend

?CONTEXT DRIVES RELEVANCE

Father

Uncle

Husband

CEO

Brother

Engineer

Page 22: Personalization Best Practices for Engaging Online Experiences

Principle #2: Understand Intent Through Engagement

Page 23: Personalization Best Practices for Engaging Online Experiences

Principle #3: Like-Minded Peers Know What They Like Best

Page 24: Personalization Best Practices for Engaging Online Experiences

Putting it All Together…

…page refers, links, entry trails,

queries, page sizes, mouse movement,

negative experience, virtual bookmarks,

time spent, exit trails…

Page 25: Personalization Best Practices for Engaging Online Experiences

Real-World Use Cases & Results

Page 26: Personalization Best Practices for Engaging Online Experiences

Use Case: Personalized Landing Pages

Unknown context

Known context

Page 27: Personalization Best Practices for Engaging Online Experiences

Use Case: Personalized Search

The crowd knows “insight” is really the LG Incite phone.

Page 28: Personalization Best Practices for Engaging Online Experiences

Use Case: Dynamic Navigation

• Real-time as trends emerge

• Based on aggregated visitor

behavior

• Brings content to the

navigation level

Popular content in category

Page 29: Personalization Best Practices for Engaging Online Experiences

Use Case: E-Mail Personalization

4x

Conversion Rate

Promotional EmailTransactional Email

Page 30: Personalization Best Practices for Engaging Online Experiences

Use Case: Video Recommendations

21% Increase in

Video Starts

Page 31: Personalization Best Practices for Engaging Online Experiences

Use Case: Recommendations Across Content Types

Most Popular, Related, Content Video, Email…

Page 32: Personalization Best Practices for Engaging Online Experiences

Use Case: Social Personalization

What I‟m cooking

today

You Might Like

Items shared by friends drive recommendations based on your preferences

Page 33: Personalization Best Practices for Engaging Online Experiences

Use Case: Identify Customer Trends

Identify Trends

Before They Happen

Find Gaps and Optimize

Product Mix

Page 34: Personalization Best Practices for Engaging Online Experiences

Use Case: Merchandising & Targeting Controls

Select Action

Select

Product

Select

where

product

should be

shown

Page 35: Personalization Best Practices for Engaging Online Experiences

Personal Profiles Serve as Filters and Constraints

Personalized store

Page 36: Personalization Best Practices for Engaging Online Experiences

Personalization Best Practices

Personalized Contextual Recommendations

Contextual Recommendations

Known

Unknown

Known

Personal RecommendationsMost Popular Products

Unknown Profile

Context

Page 37: Personalization Best Practices for Engaging Online Experiences

Real World Results: Bluefly

Profile• $84M High fashion discount eTailer• 50K SKUS, 350 brands

Results:300% lift in sales in Q4 „09

“By making recommendations more relevant from a time perspective, we knew we would get a lift, but we had no idea it would be this much"

– Marty Keane, SVP ecommerce

Challenges• Low inventory per item• Constant turnover of product• Needed real-time solution

Page 38: Personalization Best Practices for Engaging Online Experiences

Real World Results: TurboTax

Profile

• 14M taxpayers

• Award-winning support site

Results:• 35% increase in site search

conversion rates within weeks

• 73% increase within a year

“The results were so overwhelmingly positive that it became a no-brainer.”

Chris Jones, Web Analytics Manager

Challenges• Taxpayers unable to find answers• Manually hard-coding content

recommendations in results• Rapidly changing content &

seasonality

Page 39: Personalization Best Practices for Engaging Online Experiences

Baynote in a Nutshell

Company• Pioneered real-time recommendations

using collective intelligence in 2005

• 200+ web sites use Baynote today

Technology• Collective intelligence foundation

• Breakthrough UseRank® patents

Solutions• Real-time personalization, targeting and

recommendations

• SEO and SEM – peer-driven

• Search optimization – re-ranking by

engagement

• Email & video recommendations

• Insights - Merchandising, Testing,

Reporting

Page 40: Personalization Best Practices for Engaging Online Experiences

Key Takeaways

1. Avoid Common Pitfalls• Build a comprehensive customer profile first

• Create rules to target content…

• Personalization is really hard to get right

2. Best Practices for Success• Understand customer intent thru engagement

• Use Collective Intelligence to respond to

changing customer needs in real-time

• Personal profiles serve as filters & constraints

3. Start Simple…• Identify high-value personalization use case:

landing page, e-mail, product detail page

• Define clear success metrics and plan for

results within 8-12 weeks

• Use customer insights, run tests, adapt

Page 41: Personalization Best Practices for Engaging Online Experiences

Thank You for Your Participation!

• E-mail: [email protected]

• Twitter: @Baynote

Contact Information

Continue the Conversation on Twitter: #AMABaynote

• www.baynote.com

• www.baynote.com/blog

To Learn More About Baynote